Seismograph remains relaxed.
In view of the unusually uncertain situation on the capital markets, we had announced to you that we would monitor the development of the capital market seismograph very closely and closely. On April 3, the seismograph had finally indicated an increase in the equity ratio. Since then, the situation has worsened again. The probability of an import freeze for Russian oil and gas has increased. The risk of recession in Europe has risen accordingly. And at the same time, it is becoming increasingly clear that China's zero-covid strategy has failed. We were all the more curious to see how the capital market seismograph would react.
As you know, the seismograph combines various economic variables, such as early economic indicators, interest rate developments or price fluctuations on the stock markets. From these, it distills the probabilities for three market states over the next month. Green represents the expectation of a calm, positive market. Yellow denotes the probability for a turbulent positive market. And red indicates the probability of a turbulent-negative market. If this rises significantly, a massive stock market storm is looming and it's time to get out.
"As was the case a week ago, the results are again counterintuitive given the information situation," reports Oliver Schlick, managing director of Secaro GmbH, who translates the seismograph's signals into an allocation proposal. "The overall picture has continued to brighten, although the pace of improvement has slowed. The dark cloud band retreated again, but at a slower rate than before. Nonetheless, the data overall leave no other conclusion than to continue to aggressively target equity exposure."
The bottom line:
Faced with massive uncertainty about the future direction of the global economy and warning signals from the seismograph, the private wealth stock market indicator positioned itself more defensively at the end of February. Since then, the corridor for the recommended equity allocation has been between 45 and 75 percent.
As the capital market seismograph continues to consider an offensive stance to be indicated, the equity ratio suggested by the private wealth stock market indicator remains at 75 percent of the individual's intended equity allocation.
Clearly, the current situation requires investors to be highly flexible. We will therefore continue to monitor the positioning of the seismograph in a timely manner. So that we can send you a "private-wealth-alert" immediately if the assessment of the stock market indicator changes, please therefore leave your mail address at www.private-wealth.de or register with your mail address for a free six-month trial subscription.
Note: Despite careful selection of sources, no liability can be accepted for the accuracy of the content. The information provided in private wealth is for information purposes only and does not constitute an invitation to buy or sell securities.